How to become rich is a common goal among the earning individuals who are in the nascent phase of their careers. To achieve that goal, the earning individual makes his or her investment portfolio that can help them not only become rich but to meet their investment and lifestyle goals as well. However, the question that people ask quite often from their investment advisors is this: can mutual fund or SIP help them become a crorepati, at least in the long-term? The answer is yes but it requires some adaptation in his or her mode of investment. This money-making tip is simple - one needs to step-up one's monthly SIP. Major reason for enhancing the SIP annually is because your investment needs to also grow with your income.

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Taking a simpler way of SIP where an investor decides to invest Rs 3,000 per month in mutual funds in monthly mode means SIP. The time horizon for investment is 25 years and in long-term SIP one can expect at least 12 per cent returns on his or her investment. So, taking the conservative 12 per cent return in Rs 3000 SIP for 25 years, the mutual fund calculator suggests that one can get Rs 56,92,905.28 as a maturity amount. In this case, the investor hasn't step-up investment in sync with income growth. Here, the net investment is Rs 9,00,000 and wealth gained is Rs 47,92,905.28.

Taking another case where an investor runs a Rs 3,000 SIP for 25 years with an annual step-up rate of 10 per cent. In such a case, the investor would get a whopping amount of Rs 1,28,26,638 as maturity amount if the rate of return is 12 per cent as it was in the earlier case. Here, the net investment of the investor is Rs 35,38,284 and the wealth gained is Rs 92,88,354. All of it adding up to a princely sum of Rs 1,28,26,638. 

Speaking on the long-term mutual funds and SIP returns and benefit of step-up rate Kartik Jhaveri, Manager — Wealth Management at Transcend Consultants said, "In a long-term perspective, let's say for 15 years or more, one can expect at least 12 per cent return on one's SIP. However, when it goes beyond 20 years, the return can go up to 15-16 per cent because the investor gets the benefit of mutual fund compounding. So, mutual fund or SIP is always a better option in a long-term time horizon." 

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On the annual step-up rate in SIP, Jhaveri said that one's investment should also rise in sync with one's income. If someone does that then at the time of maturity, the maturity amount would be in sync with the appreciation of one's investment goal.